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Our NewsletterIssue No. 30: A Day of Reckoning Approaches for 340B, the Controversial Drug Pricing Programs
It sounded like a good idea at the time, but now, 26 years after Congress established it, the 340B Drug Pricing Program has become the object of critical reports, derisive comments by government officials, and the first small steps at reform. The program was meant to help poor hospital patients through a somewhat convoluted process. Under the law, if drug manufacturers want to be eligible to participate in Medicaid, they have to provide outpatient medicines at prices discounted by 20% to 50% to hospitals that serve a disproportionate share of low-income Americans. Such hospitals, as well as affiliated clinics, “can realize substantial savings through 340B price discounts and generate 340B revenue by selling eligible outpatient drugs at a higher price than the discounted price at which the covered entity [i.e., the hospital] obtained the drug,” according to a review earlier this year by the House Energy and Commerce Committee. The intent of 340B, whose name refers to the section of the Public Health Service Act that authorizes it, was that hospitals would use the extra revenue (the difference between the price at which they sell the drug and the discounted amount they pay for it) to help indigent and uninsured patients. Read more here |
What Others Are Saying"The anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs." "Even if pharmaceutical spending were rising as a share of total health care spending, but that rise was due to pharmaceutical investments driving down expenditures in other health care areas (e.g. a reduced need for more expensive surgeries), then it would still be inaccurate to argue that pharmaceutical spending is driving overall health care inflation." |
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